A Swedish defence agency has warned that the country is facing a growing security challenge from China, saying one of its satellite stations could be serving the Chinese military.

Claims about the station in Kiruna, northern Sweden – which was built by China in 2016 – add to controversy over increasing Chinese influence in the country, partly fuelled by rising global scrutiny of such projects involving China.

The Swedish Defence Research Agency (FOI), under the Ministry of Defence, on Sunday told broadcaster SVT that the nominally civilian cooperation with China could ultimately be controlled by the military.

FOI researchers alleged that China could be using the station – which relays images of the artic regions – to complement military intelligence or provide additional military satellite surveillance should Chinese military satellites be disabled in a time of war.

John Rydqvist, one of the researchers, said the blurred lines between China’s civilian and military spheres raised concerns for cooperation between the Swedish Space Corporation (SSC), which is owned by the government, and the Chinese satellite station.

“Organisationally, the Chinese space programme is to a very, very large extent militarised,” he said.

The station plays a role in China’s Gaofen satellite project – a network of observation satellites that provide China with global surveillance capabilities.

Rydqvist said if the information collected played a military role, Swedish authorities should be concerned.

Officially known as the China Remote Sensing Satellite North Polar Ground Station, the Kiruna facility took two years to build and is China’s “first overseas land satellite receiving station”, according to Chinese government websites.

It was built and is run by the Institute of Remote Sensing and Digital Earth (RADI) to “improve China’s capability of acquiring global remote sensing data efficiently”, according to the RADI website. The institute is part of the Chinese Academy of Sciences, a government organisation with no explicit ties to the military.

The SSC, which signed the initial agreement on the station, rebuffed the defence agency’s claims, telling SVT the cooperation was strictly civilian and downplaying the risks of the project.

But Rydqvist said the company should step up scrutiny of the station.

“As a Swedish, 100 per cent government-owned company, if there is at all any doubt that what you are doing with China could enhance military capability, it doesn’t matter if you can go anywhere else – you’re not supposed to do it,” he said.

“It’s not good for Sweden, and it could potentially be problematic in our important security cooperation with the rest of the EU and the US. If there’s the least amount of doubt, don’t do it.”

Like other countries, Sweden is assessing the security-related risks in its relations with China.

“Sweden is waking up to its China challenge,” said Viking Bohman, an analyst at the Swedish Institute of International Affairs, adding that the trend was in part driven by international pushback against China on multiple fronts.

“When European countries are limiting Huawei’s access to their markets, Swedish authorities begin wondering if they should do the same,” he said.

Last week Sweden, along with its neighbour Norway, announced it would begin investigating whether Huawei Technologies should be used to help build 5G infrastructure in the northern European countries.

On Monday, Swedish media revealed that advanced Swedish semiconductor firms had been sold to Chinese companies – and the acquisitions included dual-use technology with possible military applications.

“The overall narrative being repeated in Sweden is that we’ve been ‘naive’,” Bohman said.